A little tax break

Thanks to an obscure provision in the New Mexico tax code, a property tax break is available to a few people who might really need it.

An injured worker who receives workers’ compensation permanent total disability benefits (PTD), is low-income, and owns a home in New Mexico is entitled to a limitation on property value increases for property tax purposes. The provision is in the statutes at Section §7-36-21.3.  The same tax break also applies to anyone who is blind or permanently disabled under Social Security as well as anyone age 65 or older with an annual income under $32,000.

The statutory section is unusually important to note because of the particular problems with the workers’ compensation provision.

The workers’ comp amendment to this provision was so small that some of the usual legislative analysis is very was skipped. Nobody had asked what documentation the taxpayer would need to qualify for the tax break. So I did. I worked at the Workers’ Compensation Administration at the time.

To qualify for a property tax break, a person has to submit documentation that will be accepted by a county assessor. Nobody had asked the county assessors what would be acceptable to them. Workers’ compensation benefits are paid by insurance companies, not the state (unless the person was a state employee). There might be a court document if the injury case was litigated, but otherwise there is no such thing as a PTD certificate.

I decided to figure it out. After bouncing back and forth between my own agency and a few county assessors, I got an agreement that the WCA will, on request, research any claim for PTD and if necessary hold an evidentiary hearing to establish that it’s valid, and that county assessors will accept a document from the WCA.

A few years later, a new WCA director didn’t know what I was talking about. There is probably no one left in the agency who knows about this. Even though it relates to workers’ comp, it’s in a different chapter of the statutes. That’s why I’m writing about it.

Fortunately, very few workers suffer the kind of extremely disabling injury that leads to a PTD claim. The average in recent years is 20-30 claims per year. The disability is established, according to current law, only if the the worker has lost, or lost the use of, both hands, both arms, both feet, both legs, both eyes or any two of those body parts; or has suffered a brain injury, in which a single traumatic injury results in a 30 percent or higher brain impairment according to a standard reference known as the AMA Guides.

Taking advantage of this tax break requires some inconvenience. The disabled person has to establish eligibility on the basis of both disability and income. Because income can change, the person has to reapply each year for three years with updated evidence. Under a recent change in the law, three years is enough; after that, the status is made permanent unless the actual eligibility changes.

The tax break itself is limited to whatever the tax increase might have been for the year, based on property value. I would guess that very few people receiving permanent total disability benefits lives in very expensive homes. So the final tax benefit will be rather small – but still, possibly of real value to that disabled worker.

There’s no way to know whether anyone who qualifies for this tax break will read this column. So I’m appealing to you, reader. If you are acquainted with a disabled worker, call the worker and tell him or her about this. Then volunteer to help with the paperwork. It will be your good deed for the day.

Triple Spaced Again, © New Mexico News Services 2019






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